Private health sectors across Africa offer significant business investment returns

africa healthcare doctor 600x300

The continuum of private sector health across sub-Saharan Africa provides an extensive platform for investment. In line with global trends, the demand for local healthcare in Africa continues to gain significant momentum.

Rising chronic conditions, population growth, increasing life-expectancy and poverty stricken public health systems invites private sector investment and participation. Depending on the country, or market, risk may be high, but so could financial and social returns.

The investment lag

Despite sub-Saharan Africa’s growth economies, increasing consumer affordability and under-supply of health products and services, it is yet to attract a consistent pool of investors and businesses.

Sub-Saharan Africa’s negative reputation around governance, political and currency risks and poor infrastructure have stunted investment appetite for decades. The lack of skilled health workforces, narrow international focus on high-profile communicable diseases and misperceptions that the private sector is non-existent have also been influential.

The US with its private healthcare know-how, savvy technology and capital availability has been particularly slow to transform its experience profitably into the region. The invitation exists for products and services to be introduced in markets at different levels of maturity.

The opportunities

1. Diagnose intra-country patterns to avoid superficial country “snapshots”

Statistics and information outlining geography, economic and political affairs, cultural and language variations and private health system financing and delivery set the stage bringing an understanding of the broad regional context.

Deeper research reveals consumer trends based on provincial and city dynamics, population and income movements, cultural nuances, delivery channels and service and product pricings (or lack thereof). Without penetrating to this level of detail, market sizing and growth strategies become diluted.

2. Adjust portfolios to meet market readiness

With the exception of cities in South Africa and to a lesser extent Kenya, Mauritius and Nigeria, local consumers continue to lack wide choices for services and products across the health spectrum. This implies overall untapped demand, especially as individuals become wealthier.

Recognising the different stages of market maturity gives insight into customer readiness. For international businesses entering sub-Saharan Africa localities, unpacking service and product portfolios to fit market appetite creates more fluidity in positioning, branding and scaling. If entire offerings are transferred, customer niches could be overlooked, reinforcing a misperception that the market cannot be cracked. Staggered portfolio introduction may be a necessity for success.

3. Test systems without compromising the customer

Sub-Saharan Africa’s macro-economic and health challenges contribute to undermining business confidence in profitable, steady growth. Limited information and isolated players constrain potential market share. Fragmented systems require a novel market entry approach to overcome sector malfunction and broken delivery channels. Technology is a catalyst for bridging some of these gaps.

Therefore, delivering high-quality customer service and meeting expectations has yet to be leveraged across the region. In comparison to the US, where consumer priority is embedded in organisational culture, approaches in sub-Saharan Africa are yet to tilt towards this mental model.

Nicole Serfontein is an international health consultant and an attorney applying strategies and solutions towards health in growth markets.